John Brittas MP Urges Intervention Against Foreign Control of Indian Banks

New Delhi: Dr. John Brittas, MP, has written to Finance Minister Nirmala Sitharaman urging intervention to protect Indian banks from foreign financial institutions’ control. He has also called for a review of the FDI approval framework in the banking sector and requested that employees of Catholic Syrian Bank (CSB) continue to receive legally mandated BPS- linked salary revisions along with protection of their service conditions.

Brittas noted that during the 2008 global financial crisis, the absence of foreign control helped shield the Indian banking sector, but warned that this protective capacity is now under threat. Apart from CSB, several banks including Lakshmi Vilas Bank, Yes Bank, RBL Bank, ICICI Bank, HDFC Bank, and Axis Bank now have full or partial foreign investments.

He highlighted the acquisition of CSB by Canada -based Fairfax Group as indicative of a worrying shift in India’s banking policy and a broader trend of foreign penetration into the sector, which he said is altering the nationalised nature of Indian banks.

Once a people’s bank that served small borrowers, farmers, and entrepreneurs, CSB has significantly reduced its agricultural, educational, housing, and small business loans, while expanding credit to the corporate sector. Reports suggest the bank now requires a minimum deposit of 10,000 rupees to open a savings account, Brittas noted.

He added that CSB’s permanent staff has fallen from 2,906 in 2015 to 906, with an increase in contractual appointments and no permanent hires in the past nine years. Following foreign takeover, the retirement age for officers was reduced from 60 to 58.

Brittas urged the Finance Minister to take necessary steps to prevent foreign institutions from gaining control over banks that are critical to national economic stability.